Building the Ecosystem for Impact Investing

Why It Matters

P. Ming Wong Hong Kong

November 4, 2014

About Asia Community Ventures

Independent Hong Kong-registered charity incorporated in September 2012. Mission To help entrepreneurs build and scale social businesses that improve the

livelihood of vulnerable communities in healthcare, education and environment.

Core Programs Research on ecosystem building, policy innovation and impact investing Incubation services for entrepreneurs and their social startups Advisory services for philanthropic funders

Major Projects Completed

EncourageEnabling Role of Government

Organized and hosted Impact Investing Forum 2013: Accelerating the Industry Regionally. 350 participants from 10 Asian countries - March 2013.

Administered, on behalf of the Rockefeller Foundation, a US$400,000 Impact Economy Innovations Grant Fund for intermediaries. 40 applications from 9 Asian countries – April to November 2013.

Report #1: EngageHK

1. Map Hong Kong’s social ecosystem

2. Identify stakeholders’ needs & priorities

3. Propose ways forward for Hong Kong

Objectives

EngageHK - The Seven Sub-Sectors

Social Sector Ecosystem1. Academia

2. Private Corporations

3. Foundations & Charitable Trusts

4. Intermediaries

5. Non-Profit Organizations

6. Social Enterprises

7. Government

EngageHK: Key Recommendations

EncourageEnabling Role of Government

1. Foster cross-sector dialogue and collaboration

2. Focus on both social and economic benefits

3. Create clearinghouse for ideas and capital

4. Promote greater accountability and transparency

5. Encourage enabling role of government

What is Impact Investing?

Source: G8 Task Force on Social Impact Investing … much more than just investing in social enterprises.

Why Impact Investing?

De-risk social innovation Crowd-in private sector

support Attract new capital to grow

social ecosystem Leverage business

approaches and impact measurement tools

Recycle capital for future investments

Social Impact Investment Taskforce Report

Summary Objectives for Policymakers

Government has three important roles:

Market Builder Increase resources and support for impact-driven organizations Increase flow of talent Develop impact investment culture with a range of

intermediaries Encourage new investors to enter social impact investment

Market Participant Increase effectiveness as purchaser of social outcomes Increase investment from mainstream investors

Market Steward Design appropriate regulatory & legal framework for impact

driven organizations Reduce legal & regulatory barriers for impact investors

G8 National Advisory Board Reports

UK

USA

Japan

France

Australia

Italy

Canada

Germany

Report #2: Adopting the London Principles

1. Analyze Hong Kong’s social funds

2. Introduce the London Principles

3. Propose policy innovations for Hong Kong

Objectives

Observations on Existing Social Funds

Different Approaches, Rather Disconnected Variations of Government Social Subventions Lacks Intentionality for Sustainability and Scalability

Our HK$500 million Social Innovation & Entrepreneurship Development (“SEI”) Fund has potential to address these gaps and be different from existing funds.

The London Principles of Impact Investing

Preamble… a set of guidelines intended to assist governments considering impact investing as a tool to address social objectives,… offer guideposts that ideally point to better strategy and policy development,… are drawn from a multitude of political, economic, and cultural contexts.… support a reflective approach that drives learning and innovation.

Summary Recommendations for Policymakers

Clarity of Purpose Create an impact investing agenda Establish an Office of Social Innovation Conduct needs-based assessment of social funds as linked to

longer-term social issues

Stakeholder Engagement Provide a public platform for impact investing policy review Provide incentives to foster an enabling environment for impact

investing and social innovation Engage with global impact investing community

Market Stewardship Demand-side through partnerships Supply-side through further research initiatives Intermediary development via targeted funding at scale Policy and legal infrastructure

Summary Recommendations for Policymakers

Institutional Capacity Review departmental and policy focus to be responsive to

addressing structural social challenges Commission internal review of existing institutional capacities

and policies

Universal Transparency Funder – support ideas and initiatives addressing structural

issues Regulator – foster policy transparency and reliability Enabler – leverage on open data approaches to spur social

innovation via technology

About Giinseng

Learning by Doing

Engage with Social Entrepreneurs

Invest in Social Businesses

Crowd Funding

Going Forward

Impact investing is moving into the mainstream and will be a potent force for social good to supplement government funding.

Creating an ecosystem to promote social innovation and impact investing is the way forward..

Photo Credit: Eddie Kwong/WMA Open Photo Contest 2013

One More Thing

Photo Credit: Dale de la Ray/AFP/ Getty Images